I’ve just had my first scare with Bitcoin, the virtual crypto-currency that I decided to dabble with. I bought 4.943 Bitcoins for $98 last week through the Mt. Gox exchange. I haven’t done anything with them since then, so they have remained at Mt. Gox in my trading account. I was scrolling through Twitter today and noticed a tweet from one of the Bitcoin-related accounts I follow warning of a hack at Mt. Gox. The site had a message posted saying all activity has been frozen after someone had $1,000 worth of Bitcoins stolen. Here’s the fun part: More

I now have Bitcoins! What should I do? Hopefully no one will steal them, like someone apparently did in the case of $500,000 from an early adopter. The theft report could be bogus. I don’t know! I’m playing with funny money. I have nearly 5 Bitcoins baby. Watcha gonna do? Are Bitcoins a scam? It’s up to you.

I haven’t posted for a while because I have been researching Bitcoin, an anonymous form of online “crypto-currency” that has been popping up in the news. Some are calling it the future of money. The most popular answer from a software developer posting on the Q&A site Quora calls it “a scam.” I still don’t fully grasp the mechanics of how Bitcoin works, but the news is piling up. What has gotten the most attention is the use of Bitcoins to pay for drugs through a peer-to-peer network called Silk Road. It was first widely reported on June 1 on Gawker. That attracted the attention of two U.S. senators who are now calling for a federal investigation of Silk Road. The association of Bitcoin with Silk Road is triggering official scrutiny of Bitcoin. Obviously, governments do not like unofficial currency floating around. But it is not clear whether authorities can do anything to end its use. Bitcoin likely will thrive or fail based on whether users remain confident that it has transferable value. I figured that a good way to help me understand Bitcoin is to try and get some for myself. That, however, is not something simple and easy to do. More